"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision, author of Things That Make You Go Hmmm...one of the world's most popular & widely-read financial publications.

Friday, 16 December 2016

Households never wealthier as net worth passes $9 trillion

Record wealth

Contrary to mischievous reports of declining living standards, household net worth blazed past a record $9 trillion the September quarter to an fresh high of $9,061.7 billion.

Of course, people like to argue that we aren't getting better off on a per capita basis, particularly those that don't like immigration, like Dick Smith.

However, this is not backed up by the figures, as average net worth per capita also rose to an all-time high of $374,300.

Australia has the second highest net worth per adult in the world, behind, well, Switzerland.

What is true is that wealth is tilted in favour of property owners, with $4.2 trillion of household equity tied up in Australian residential land and dwellings.

Not that surprising given how poor returns from Australian shares have been over the past decade - if it wasn't for compulsory superannuation the proportion of wealth held in equities would be even lower.

Note that the total value of residential land and dwellings is actually a little higher than implied by the chart at $6.1 trillion, but technically not all of these assets are owned by households.

A chart which will no doubt cheer Treasurer Morrison shows that the debt to assets ratio has declined to 20 per cent from the peak of 22.2 per cent in March 2009!

This quarter's figures also showed a spike in gross household income growth, which helped to push the interest payable to income ratio down to below 10 per cent, which is about where it was before the Sydney Olympics all the way back in the year 2000.

A poor quarter for GDP growth, then, but household wealth surged to a record high of $9.1 trillion, so it's hardly all bad out there.

R > g

You might look at these figures and wonder whether they are fair, or whether net worth is being distributed fairly across all age ranges, genders, social groups, and so on.

I can save you a lot of time there, because the answers are 'no and no'.

The answers will always be 'no and no'.

However, if you're brain is telling you that "it can't be done" when it comes to building wealth, the numbers contradict you.